Automaker Bailout Sparks Interest from Environmental Groups

This week, Congress debated an auto industry bailout bill of $25 billion. The executives of the Big Three Automakers – Ford, Chrysler and General Motors – testified at congressional hearings (after spending tens-of-thousands of dollars to fly in on their luxury private jets, one of which cost $36 million) and asked for federal support.

Reactions to the Detroit automakers’ requests have been mixed, from support to flat-out opposition.

The Civil Society Institute (the organization behind 40MPG.org and CLEAN) sent out an action alert at the beginning of the lame-duck session, asking its supporters to contact members of Congress and President-elect Barack Obama’s transition team in support of a Green Auto Bailout. The goal being to have conditions on a bailout that would require the car manufactures to develop and produce more hybrids, clean diesels and fuel-efficient vehicles, as well as drop their lawsuits against states with higher global warming emissions standards, such as California, Vermont, Rhode Island and New Mexico.

“If taxpayers are going to be put at risk by guaranteeing new loans, then any such new help should be conditioned on the U.S. car companies ending their campaign to frustrate state-level efforts to clean up car and light-truck emissions that cause global warming,” said 40MPG.org founder Pam Solo. “Further, Congress should insist that every penny of the $25 billion in new loan guarantees that Detroit is seeking to building the cars of tomorrow, not the gas-guzzling dinosaurs of yesterday.”

Although Congress is leaving for Thanksgiving break, Speaker of the House Nancy Pelosi and Senate Majority Leader Harry Reid said they may call Congress back in session at the beginning of next month to continue work on the automaker bailout bill and other economic issues before the next holiday break.

40MPG and CLEAN are still encouraging people to sign and e-mail the action letters, since the issue is still on the table.

There is some support for environmental preconditions in Congress, but others argue clean energy restrictions might make the bill more difficult to pass. It is estimated that if even one American automaker goes under, more than 2 million jobs will be lost in 2009.

The Big Three's stockholders profited handsomely after they replaced sedans like the Dodge Intrepid with the more profitable, monstrous Durango. Biden attended the September 1997 “celebration” of this in Newark, Delaware. These stockholders took their risk, and now the market cap of all three US car makers together is probably less than the bailout loans requested. So if they want our tax money to be risked on loans, the federal government should do much more than the silly symbolism of appointing a “Car Czar.” It should condition a bailout on the Big Three's finally accepting the UAW's 1934 demand: abolish overtime, reduce work to 30 hours/5-day week and keeping pay steady. It should require the Big Three to put their job bank employees back to work. It should require reduction in the number of models and prices by eliminating annual model changes in favor of a 5-year or 3-year body style. And to deal with the SUV devastation they should have to dismantle, say, 50% of their capacity to produce SUV's, these WMAD (Weapons of Mass Atmospheric Destruction) and melt down key parts.

Richard Boyden

11/25/2008 4:04:16 PM

The law of supply and demand says that if people don't want gas guzzling automobiles, then we shouldn't have Congress shove them down our throat.

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